Cessna Finance Repossessions: Navigating the Skies of Default

Owning a Cessna aircraft represents a significant investment. Whether it’s for personal enjoyment, business travel, or flight training, the costs extend beyond the initial purchase price. Like any major asset acquisition, many Cessna buyers rely on financing, often through Cessna Finance Corporation (CFC), a subsidiary of Textron Financial Corporation.

When borrowers encounter financial difficulties and fail to meet their loan obligations with CFC, repossession becomes a potential consequence. Aircraft repossessions are complex processes governed by both state and federal laws, including the Uniform Commercial Code (UCC). Understanding how Cessna Finance approaches repossession is crucial for borrowers facing financial strain.

Triggers for Repossession

The most common trigger for repossession is a failure to make timely loan payments. The loan agreement will outline the specific terms, including the grace period, if any, before a default is declared. Other factors, such as failing to maintain adequate insurance coverage on the aircraft or neglecting required maintenance, can also constitute a breach of contract leading to repossession.

The Repossession Process

Before initiating repossession, CFC typically attempts to contact the borrower to explore potential solutions, such as loan modifications or payment arrangements. However, if these efforts are unsuccessful, the lender will proceed with legal action. The process generally involves providing the borrower with a notice of default and an opportunity to cure the default within a specified timeframe.

If the borrower fails to cure the default, CFC can then legally repossess the aircraft. This can be done through self-help repossession, meaning they can take possession without a court order if it can be done without breaching the peace. Alternatively, they may seek a court order authorizing the repossession, especially if the borrower resists.

After Repossession: Sale and Deficiency

Once the aircraft is repossessed, CFC will prepare it for sale, often through auctions or private sales channels specializing in aviation assets. They are legally obligated to sell the aircraft in a commercially reasonable manner. The proceeds from the sale are applied to the outstanding loan balance, including accrued interest, repossession costs, and sales expenses.

If the sale price of the aircraft is insufficient to cover the total amount owed, the borrower remains liable for the deficiency. CFC can pursue legal action to recover this deficiency amount, potentially impacting the borrower’s credit rating and financial future. Borrowers have the right to challenge the commercial reasonableness of the sale if they believe it was not conducted fairly or resulted in a significantly lower price than the aircraft’s market value.

Protecting Your Rights

If you are facing financial difficulties and struggling to make payments on your Cessna aircraft loan, it’s essential to contact Cessna Finance immediately to explore potential solutions. Consider seeking legal counsel to understand your rights and options. Negotiating with the lender, exploring alternatives like loan modifications or voluntary surrender of the aircraft, and carefully reviewing all legal documents are crucial steps in navigating a challenging situation.